Outplacement: Should You or Shouldn’t You and Why

Raise your hand if you have been in a downsizing, lay off, or right sizing event. If you’re reading this and you’re older than 12, your hand is no doubt high in the air. With less and less loyalty today on both the employee and employer side, it is likely to happen at some point in your career. No company is immune to resorting to such measures. An added catalyst today is the plethora of mergers and acquisitions. Companies don’t need two of the same position; for example, there can only be on compliance officer, one CHRO, one CFO, one COO, etc. Turnover is expensive and outplacement has its price. However, the cost of not doing outplacement may be costlier than you think, here’s why.

Your Good Name

Well, you can knock me down, Step in my face, Slander my name All over the place.

Do anything that you want to do, but uh-uh, Honey, lay off of my shoes Don't you step on my Blue suede shoes.

These lyrics are from a song by the late, great Elvis Presley. Today, he might rethink the idea about name slandering. With the rise of social media and the platforms it presents for people to post anything they want, including the good, the bad, and especially the ugly, protecting your brand name is a wise decision. Providing outplacement for the employees who have been working to help your organization grow for 5, 10, 15, or 20 years deserve some assistance in reaching the next step in their career. The lay off comes at no fault of their own and no doubt you do not need reminding of the bitterness that can result, not to mention the ability of bad news and gossip to travel at warp speed. Don’t make your organization and good name a target of such activities. Outplacement is the less costly and a good protection plan for your good name.

Those Left Behind

After a layoff, employees who stay, experience sadness, a sense of loss, and guilt. When you think about relationships being ripped apart, collaboration being destroyed, and support systems disappearing, it’s no wonder. Now the organization is left to deal with disengagement, low productivity, gossip, anger, doubt, low morale, distrust, fear, and even sabotage. Providing outplacement assistance can provide those left behind with a sense of comfort knowing that their co-workers and friends will have help. In addition, they will have better trust of the organization not only for their coworkers, but for themselves as well in case they experience a layoff in the future.

Layoff Litigation

According to an article by Phillip M. Perry, lawsuits during layoffs increase for three reasons:

During times of economic disruption, layoffs increase, and therefore the number of people amenable to ligation increases.

Discrimination laws can provide a foundation to sue.

Attorneys look for new clients during such times. When the client pool is large, attorneys can then afford to represent workers on a contingency basis. This in turn encourages laid off workers to sue because the risk to them is mitigated.

Organizations can reduce litigation by doing some simple planning.

Ensure that the lay off is for strategic business reasons. For example, you may want to stop carrying or producing a product, you may be closing a location due to low revenues or any number of legitimate reasons.

Communicate the decision and necessity for these tough business decisions to workers, so that when the lay off is imminent, they are better able to prepare.

Offer outplacement services by a third party. Spending money on outplacement may far outweigh the cost of litigation.

Providing outplacement assistance can keep people from slandering your name all over the place and it’s the right thing to do. So you should and that’s why.

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